Network externalities in telecommunication industry: An analysis of Serbian market

Trifunović, Dejan; Mitrovic, Djordje

doi:10.5937/industrija1-8886

Cited by 4 publications

(4 citation statements)

References 20 publications

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“…There is some evidence that individual choice of operator is influenced by the total number of subscribers for each operator, but a much stronger effect is the operator choice of other household members [17]. Trifunovic, Mitrovic, and Ristic [18] have determined that users of the network with the largest market share benefit the most from call externalities. In addition, one network does not price discriminate between outgoing and incoming roaming calls, which implies that users of this network have higher level pecuniary externalities in roaming compared to users of price discriminating networks [18].…”

Section: Literature Reviewmentioning

confidence: 99%

“…Trifunovic, Mitrovic, and Ristic [18] have determined that users of the network with the largest market share benefit the most from call externalities. In addition, one network does not price discriminate between outgoing and incoming roaming calls, which implies that users of this network have higher level pecuniary externalities in roaming compared to users of price discriminating networks [18]. The existence of positive externalities between contents and applications available on Internet and their effects on the incentives of network operators to provide neutral access, emphasize the importance of regulating this area.…”

Section: Literature Reviewmentioning

confidence: 99%

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Effects of Digital Transformation and Network Externalities in the Telecommunication Markets

2019

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The main purpose of the paper is to address the effects of digital transformation in the telecommunications markets which are characterized by network externalities. By acknowledging disruptive effects of digital transformation age, the paper highlights challenges which were created by advancement of technological capabilities. The specific aim of the paper is to present a methodological framework for measuring the information society. The research will be based on an analysis of the number of subscribers by types of telecommunication services, in developed and developing countries, in the last two decades. In this regard, increasing the number of subscribers leads to higher value of the selected network. We expect confirmation of both hypotheses respectively (H1: Digital transformation affects the simultaneously continuous growth of the number of subscribers and the continuous decline in prices of telecommunication services; H2: There are similar trends in developed and developing countries, which are related to the number of the telecommunication services subscribers). Therefore, digital transformation and the effect of network externalities contribute to increasing the number of subscribers, reducing the number of networks (distortion of the market competition) and reducing the prices of telecommunication services.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Effects of Digital Transformation and Network Externalities in the Telecommunication Markets

2019

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“…Consumers prefer subscribing to a large, rather than a small network, since the former offers a higher value in the sense of the number of people they could reach, resulting in large network becoming even bigger and more attractive to future consumers in comparison to smaller networks (Kim and Kwon, 2003). The dominance of a single network due to market externalities represents a serious threat to the overall competitiveness of the sector (Blonski, 2002;Shy, 2003;Trifunovic et al, 2015) because the dominant network is able to sustain much higher prices of its services without the fear of losing its market share. To avert this, mandatory interconnection ensures that a consumer subscribing to any network will have access to consumers from all other networks, thus eliminating to a certain degree the potentially negative role of network externalities.…”

Section: Network Externalities In Telecommunicationmentioning

confidence: 99%

Bosna-Hersek`teki̇ Telei̇leti̇şi̇m Sektörünün Düzenleme Zorluklari

Zaimović

2018

İktisadi İdari Ve Siyasal Araştırmalar Dergisi

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Much anticipated privatization of the two remaining incumbent telecom operators in Bosnia will create a new dynamic and changing environment for all participants in this sector, especially for potential investors that are trying to find the right approach and a competitive market niche. The intention of this paper is to provide an overview of regulatory developments in the telecommunication sector over the past two decades, major challenges, accomplishments, and the role played by State Communication Regulatory Agency (CRA). The research includes the analyses of adopted Sector Policies, the Telecommunication Law itself, as well as the rules and major decisions issued by CRA. Through a countrywide survey and multinomial logit estimation of consumer's selection between the two largest mobile carriers, as well as in-depth interviews with the sector participants and CRA-we provided consumers' and participants' opinions of the sector development, achievements, challenging issues, and major stepping stones. Asserting its role as an independent regulatory authority and despite unprecedented political difficulties, the CRA has managed to complete the overall process of sector liberalization. It has done so mostly by utilizing an ex-ante form of regulation and proactively addressing critical areas for the sector development. But, market conditions are constantly changing and the demand for ex-post regulation will bring new challenges for regulatory authorities. The privatization of remaining incumbent carriers, making the maximum use of local-loop unbundling and open network provision, is only one of them. Also, securing the balanced infrastructure development and ensuring that the overall social welfare gains are equally distributed throughout the country will present new and evermore challenging questions for country telecommunication regulatory authorities.

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“…The market growth rate was very high until 2008 and then much slower from 2009 until 2011; the market stabilised at 10.1 million users in 2011 and subsequent years. The state-owned company, MTS, was the largest operator in the market until between 2009 and 2014 it lost 1.4 million users (or 23.54%) while its competitors increased their number of users -Telenor by 5 A more detailed analysis of the Serbian market is presented in Trifunović and Mitrović (2016b).…”

Section: The Serbian Marketmentioning

confidence: 99%

Pro-competitive regulatory policies for post-paid and pre-paid mobile phone markets

Trifunović

Mitrovic

2018

EKON ANAL

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There are two types of switching costs when users change their mobile operator. The first stems from price discrimination when the network charges a lower price for on-net than for off-net calls. If the majority of the switching user?s contacts are in their current network, this imposes an obstacle to changing the network, since in the new network they would have to pay a higher price for off-net calls. The other switching cost results from the switching user having to inform all their contacts about their new number in the other network. Mobile phone number portability (NP) reduces this switching cost. This paper?s aim is to determine pro-competitive regulatory policies for the post-paid and pre-paid market segments. This distinction is important since the post-paid market dominates in developed countries, while in less developed countries the prepaid market dominates. There are two operators in our model, the incumbent and a new entrant. In the postpaid market, NP reduces the level of market concentration. In the pre-paid market, NP has no impact on the convergence of market shares, and the reduction of access charges (the fee for terminating calls in the rival network) turns out to be a pro-competitive regulatory policy. There is no need for asymmetric access regulation where the incumbent pays higher access charges than the new entrant.

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Network externalities in telecommunication industry: An analysis of Serbian market

Cited by 4 publications

References 20 publications

Effects of Digital Transformation and Network Externalities in the Telecommunication Markets

Effects of Digital Transformation and Network Externalities in the Telecommunication Markets

Bosna-Hersek`teki̇ Telei̇leti̇şi̇m Sektörünün Düzenleme Zorluklari

Pro-competitive regulatory policies for post-paid and pre-paid mobile phone markets

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